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HF 560

3rd Engrossment - 87th Legislature (2011 - 2012) Posted on 02/13/2012 03:12pm

KEY: stricken = removed, old language. underscored = added, new language.


Version List Authors and Status

Bill Text Versions


Introduction Pdf Posted on 02/17/2011
1st Engrossment Pdf Posted on 03/21/2011
2nd Engrossment Pdf Posted on 02/01/2012
3rd Engrossment Pdf Posted on 02/13/2012

Current Version - 3rd Engrossment

1.1A bill for an act
1.2relating to public administration; modifying provisions governing energy
1.3forward pricing mechanisms for government agencies; amending Minnesota
1.4Statutes 2010, section 16C.143; repealing Minnesota Statutes 2010, sections
1.5383B.1588; 473.1293.

1.7    Section 1. Minnesota Statutes 2010, section 16C.143, is amended to read:
1.9    Subdivision 1. Definitions. The following definitions apply in this section:
1.10(1) "energy" means natural gas, heating oil, propane, diesel fuel, unleaded fuel, and
1.11any other energy source except electricity used in state operations; and
1.12(2) "forward pricing mechanism" means either: (i) a contract or financial instrument
1.13that obligates a state government agency to buy or sell a specified quantity of energy
1.14at a future date at a set price.; or (ii) an option to buy or sell the contract or financial
1.15instrument; and
1.16(3) "government agency" means the state, the Minnesota state colleges and
1.17universities, the University of Minnesota, a statutory or home rule charter city, a county, a
1.18town, a school district, a regional agency, or another political subdivision.
1.19    Subd. 2. Authority. Notwithstanding any other law to the contrary, the
1.20commissioner a government agency may use forward pricing mechanisms for budget
1.21risk reduction.
1.22    Subd. 3. Conditions. Forward pricing mechanism transactions must be made only
1.23under the following conditions:
2.1(1) The quantity of energy affected by the forward pricing mechanism must not
2.2exceed 90 percent of the estimated energy use for the state government agency for the same
2.3period, which shall not exceed 24 48 months from the trade date of the transaction; and.
2.4(2) a separate account must be established for each state agency using a forward
2.5pricing mechanism.
2.6    Subd. 4. Written policies and procedures. Before exercising the authority under
2.7this section, the commissioner government agency must develop written policies and
2.8procedures governing the use of forward pricing mechanisms.
2.9    Subd. 5. Oversight process. Before exercising authority under subdivision 2,
2.10the government agency must establish an oversight process that provides for review of
2.11the government agency's use of forward pricing mechanisms. The oversight process
2.12must include: internal or external audit reviews in a manner prescribed by the state
2.13auditor; annual reports to, and review by, an internal investment committee; and internal
2.14management control.
2.15EFFECTIVE DATE.This section is effective July 1, 2012, and applies to forward
2.16pricing transactions entered into on or after that date.

2.17    Sec. 2. REPEALER.
2.18Minnesota Statutes 2010, sections 383B.1588; and 473.1293, are repealed.
2.19EFFECTIVE DATE.This section is effective July 1, 2012. The authority
2.20previously granted by Minnesota Statutes, sections 383B.1588 and 473.1293, is granted
2.21under Minnesota Statutes, section 16C.143, and the repeal of Minnesota Statutes, sections
2.22383B.1588 and 473.1293, does not affect any forward pricing transaction entered into
2.23before the effective date of this section.

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